2021-09-03_Friday

00:00:00.000 | Today on Radical Personal Finance it's Friday and that means live Q&A.

00:00:20.200 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,

00:00:23.000 | skills, insight and encouragement you need to live a rich and meaningful life now while

00:00:27.640 | building a plan for financial freedom in 10 years or less.

00:00:30.880 | My name is Joshua Sheets.

00:00:31.960 | I am your host.

00:00:33.040 | I am your guide.

00:00:34.160 | I am your confidant.

00:00:35.920 | I am your friend.

00:00:37.200 | Here in this journey with you today.

00:00:38.520 | Today we do live Q&A as we do at the moment every Friday.

00:00:52.240 | Each and every Friday at Radical Personal Finance we do a live Friday Q&A show.

00:00:55.960 | It's just like call and talk radio.

00:00:57.680 | You call in and talk about whatever you want.

00:00:59.400 | Ask a question.

00:01:01.560 | Share with me your comments, your feedback.

00:01:03.040 | We brainstorm about anything that you are interested in doing.

00:01:06.280 | And so if you would like to join me for a Friday Q&A show you can do that by becoming

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00:01:12.540 | Sign up to support the show there on Patreon and that will gain you access to one of these

00:01:19.720 | Friday Q&A shows.

00:01:21.080 | And I do these Friday Q&A shows each and every week in which I can arrange my travel schedule

00:01:26.160 | and arrange the appropriate technology to do so.

00:01:29.480 | We begin today with Sarah in Tampa.

00:01:31.320 | Sarah welcome to the show.

00:01:32.320 | How can I serve you today?

00:01:33.320 | Hi.

00:01:34.320 | So my husband and I are renting a house and we've been saving for a down payment on a

00:01:39.880 | home.

00:01:40.880 | We were originally hoping to reach that goal by early 2023 along with paying off the rest

00:01:46.000 | of our debt which consists of $12,000 in student loans that are currently on pause by the federal

00:01:52.760 | government.

00:01:53.760 | However, our landlord called us earlier this week to let us know he has terminal stage

00:01:59.280 | 4 cancer and might die soon which is extremely sad of course.

00:02:04.480 | And it was really nice of him to let us know.

00:02:08.480 | But he's offered to sell us the house that we're currently renting from him off the market.

00:02:13.360 | So if he hasn't put it on the market, if we don't buy it his estate will most likely put

00:02:18.120 | it up for sale.

00:02:19.120 | But to avoid him just selling the house from under us he was nice to offer it to us.

00:02:25.960 | If we buy the house it will wipe out our savings completely since this is earlier in the timeline

00:02:30.700 | than we were planning and it will also delay us paying off our debt.

00:02:34.760 | So I have two questions for you.

00:02:37.600 | Do you think it would be financially wise for us to move forward with trying to purchase

00:02:41.760 | the home?

00:02:43.840 | We were already pre-qualified.

00:02:44.840 | I went ahead and moved forward looking into some financing options.

00:02:49.120 | And second question, what advice do you have for navigating this situation specifically

00:02:53.800 | as it relates to negotiating with someone who's dying and being sensitive to that?

00:02:58.800 | How much debt do you currently, do you still have?

00:03:02.960 | We have $2,000 in student loans.

00:03:05.160 | And again those are on pause because they're federal student loans.

00:03:09.180 | How much is your household income?

00:03:12.920 | Per year gross $105,000.

00:03:17.040 | And how much more or less is this house worth do you think?

00:03:22.240 | I think it's worth around $250,000.

00:03:23.760 | But he's trying to sell it to us for $275,000.

00:03:27.720 | Do you like the house?

00:03:31.040 | We do.

00:03:32.040 | I mean we have a lot of memories in the house.

00:03:34.840 | It does, it is pretty old.

00:03:36.880 | It would require a lot of fixing up to do.

00:03:39.960 | But we love our neighborhood.

00:03:40.960 | We love, you know, we've lived here for a little over four years.

00:03:45.040 | So we would be very happy to like stay in this house and then put some work into it

00:03:50.500 | and fix it up.

00:03:51.500 | And our neighborhood, you know, it's in a place where it would potentially go up in

00:03:55.500 | value as well.

00:03:57.040 | Do you have any personal challenges that would make renting a different house difficult such

00:04:01.320 | as do you have a bunch of children?

00:04:03.440 | Do you have a bunch of big dogs?

00:04:05.520 | Something like that or are you pretty easy going renters?

00:04:09.840 | We're easy going renters.

00:04:10.840 | We have no children and no animals.

00:04:13.120 | So it doesn't get any easier than that.

00:04:21.160 | Let's begin with number two, advice for navigating the situation.

00:04:26.920 | You've probably done just about all that you can do in terms of I'm sure that when he said

00:04:31.640 | I have stage four terminal cancer, you expressed appropriate sympathy.

00:04:37.280 | You expressed the appropriate sympathy.

00:04:39.800 | Let's see if I can get my words out tonight.

00:04:42.760 | And you know, you inquired about the situation, etc.

00:04:46.840 | There's really not much more that can be done, right?

00:04:49.040 | At the end of the day, every single one of us ends up six feet underground.

00:04:54.320 | There's no reason not to deal with that straightforwardly.

00:04:58.160 | And without question, people die of cancer all the time.

00:05:03.000 | And I don't think it should be weird to deal with people or talk to people who are dying.

00:05:07.000 | I think it should deal with it straightforwardly and not engage in some kind of strange tiptoeing

00:05:12.360 | around the subjects, etc.

00:05:13.800 | Now obviously some people have a hard time talking about it, but I don't think it should

00:05:19.620 | be hard for you.

00:05:21.080 | And also it's not your problem.

00:05:24.360 | You certainly appreciate he's done the good thing by coming and simply sharing with you

00:05:29.480 | that hey, this is what's going to happen.

00:05:32.240 | But you don't have any responsibility towards him that is different because he's probably

00:05:38.280 | going to die very soon than you do right now.

00:05:42.680 | And so I don't see any reason why you need to take on any burden of that other than just

00:05:47.160 | the natural normal human sympathy that you'll have for his situation.

00:05:51.300 | So with regard to navigating it, I think you need to start by doing exactly the same thing

00:05:55.860 | you would do at any other time, which is simply think through your own situation.

00:06:00.380 | Think through what is best for you.

00:06:02.480 | Try to analyze it as we're doing right now.

00:06:06.160 | And then decide, okay, if this weren't the factor, would I want to buy this house and

00:06:11.280 | under what terms would I want to buy the house?

00:06:14.580 | None of the scenario with the property is his problem.

00:06:20.480 | So none of it is your problem.

00:06:24.300 | You don't need to take on anything.

00:06:26.460 | And if you are a couple, two people, without children, without dogs, then you basically

00:06:33.660 | have no problems in the rental market.

00:06:36.140 | I have problems.

00:06:37.700 | I've got four children and two dogs.

00:06:41.660 | I'm a hard tenant to find a suitable place.

00:06:45.160 | But two people, it's relatively easy to find a suitable place.

00:06:48.260 | You don't need to worry about being out on your ear.

00:06:51.300 | And so let's talk about financially wise.

00:06:54.280 | How much down payment do you currently have?

00:06:58.340 | We're planning to put $15,000 down.

00:07:00.980 | But how much do you have currently?

00:07:01.980 | Do you have $15,000?

00:07:04.780 | We have around $18,000 and by the time we would get to closing, which based on conversations

00:07:11.300 | with him, we'd close sometime in November, we would have a little bit more cash on hand

00:07:16.180 | by then because I'm getting a small bonus next month.

00:07:18.860 | Congrats.

00:07:19.860 | Awesome.

00:07:20.860 | And we'd be able to save around $2,000.

00:07:22.860 | We've been saving around $2,000 per month.

00:07:25.940 | So the first thing is, is it financially wise?

00:07:29.020 | Can you afford the house?

00:07:30.020 | I would say almost certainly.

00:07:32.180 | Even if you bought it for $275,000, if you have a household income of $105,000, if the

00:07:36.980 | only debt that you have is $2,000 of student loans, and if you've saved up...

00:07:41.260 | $12,000, sorry.

00:07:42.260 | Oh, okay.

00:07:43.260 | I must have written the wrong number down.

00:07:46.260 | And if you saved up a down payment, I don't see any reason why you should delay buying

00:07:52.340 | a house if it's a good deal as compared to waiting until you pay off the student loans.

00:08:00.180 | When a deal presents itself, I think you should assess it afresh.

00:08:04.980 | So if you're in a situation where, "Hey, our goal is we're paying off student loans, we're

00:08:08.620 | paying off student loans and we're saving down payment, paying off student loans and

00:08:11.540 | saving down payment."

00:08:12.860 | But all of a sudden a great deal comes along, then I think you should pause and say, "Is

00:08:17.380 | this deal good enough to motivate me to actually move quickly?"

00:08:21.780 | And there's no reason why you shouldn't change your plan if you come across a great deal.

00:08:28.360 | To me, that's a rational approach to changing circumstances.

00:08:34.020 | A lot of people don't like to do this, right?

00:08:35.660 | You get a certain plan and you say, "This is the plan.

00:08:38.740 | We're going to pursue this plan.

00:08:40.620 | We're going to follow these baby steps.

00:08:42.400 | We're going to get out of debt before we buy a house."

00:08:44.180 | Great.

00:08:45.180 | Fair enough.

00:08:46.900 | I appreciate people who have a clear plan, but plans should be changed if circumstances

00:08:53.940 | change.

00:08:54.940 | And so what you're describing is a thing where circumstances can change and at that point

00:08:58.820 | in time you rethink through the plan.

00:09:00.980 | So just because your previous plan was pay off the debt first, I don't believe you're

00:09:04.100 | beholden to that.

00:09:05.740 | My big questions would be, number one, is this a good deal for you?

00:09:10.060 | Do you like the house?

00:09:11.320 | Is this the house that you would pick?

00:09:13.860 | Especially knowing its condition, is this the house that you would pick if you were

00:09:17.540 | going back out in the market yourself?

00:09:20.100 | Now there is tremendous value to liking the neighborhood, to having been there for four

00:09:25.140 | years, to not having to move.

00:09:26.700 | Those things are valuable.

00:09:28.220 | But you should as best possible ask yourself, "Would we choose this house again?" based

00:09:32.620 | upon these terms.

00:09:34.220 | You should know that you're in a situation where you could potentially solve his problem.

00:09:38.860 | If he needs to sell now because he needs to raise the cash out of the property rather

00:09:43.240 | than leaving it for his estate, there's no one better for him to sell it to than you.

00:09:48.060 | And so what I would do is for his sake, I would make this decision very quickly.

00:09:53.020 | I would think through, "Do I want to buy this house or not?"

00:09:56.020 | If I do, you've already gotten pre-qualified, that's great, I would do the deal very quickly.

00:10:01.880 | But in exchange for doing the deal quickly, I would make sure the deal was something that

00:10:05.740 | was exciting to me.

00:10:07.380 | If he doesn't have to market the property, that could potentially save him months that

00:10:12.340 | he doesn't have.

00:10:13.660 | Now, we live in a world right now, especially in Tampa, Florida, where the market is very

00:10:18.140 | hot and so he's certainly aware of that, that if he puts the property on the market quickly,

00:10:23.500 | he can get somebody interested quickly.

00:10:26.140 | Does he have a contract with him up to a certain date at the moment?

00:10:30.860 | Well, our lease, we renewed our lease May 1st, so I mean, we technically are still under

00:10:39.460 | our rental agreement, but I'm sure there's terms in there where he could cancel it at

00:10:44.060 | any time.

00:10:45.420 | You should check the lease and find out what the lease says and see what language is actually

00:10:48.980 | written in there if he wanted to sell the property.

00:10:51.980 | Because this could play to your negotiating favor, where if he has to keep you in there

00:10:55.740 | until the date that your lease terminates and then sell the property, or if he has to

00:11:01.580 | sell the property subject to it being inhabited by his tenants, then that could weigh in your

00:11:07.260 | favor because you could solve a problem for him by simply changing the contract and buying

00:11:12.180 | the house.

00:11:13.180 | I guess, without going into greater depth, I would say it sounds to me like you like

00:11:18.000 | the neighborhood, you know what's wrong with the house, I would make him an offer.

00:11:22.180 | And I would make him an offer to close quickly on it.

00:11:25.220 | I would make him an offer with, at this point in time, you should know more or less everything

00:11:30.300 | that's wrong with the house, so maybe you can expedite the inspection, you can try to,

00:11:35.860 | I guess if you're financing it though, you'll still have to do that, but you could try to

00:11:38.940 | expedite the deal and make him an offer.

00:11:41.460 | And if you think it's $250, but he wants $275, then make him an offer for a little bit less

00:11:46.140 | and say, "Listen, we know you want to sell the property quickly, probably, you know,

00:11:51.340 | it's a very hot market.

00:11:52.720 | Probably if you put the property on the market, you could sell the property for more money.

00:11:58.740 | After all, you know, it's a desirable property."

00:12:01.420 | I would then clarify, of course, you have a problem with the lease, right?

00:12:04.500 | That we have a rental contract here, and depending on what the terms of the lease say, consider

00:12:09.160 | what your rights are there.

00:12:10.960 | But we would actually like to buy the property, but we don't quite have all the money together

00:12:15.980 | that we would like to, and it's just not worth $275 to us.

00:12:19.460 | So we would love to make you an offer for whatever you believe is fair, right?

00:12:24.300 | $235.

00:12:25.300 | That'll save you any cost or hassle of marketing the property.

00:12:28.360 | We'll close quickly.

00:12:29.360 | We'll close in X number of days, as quickly as we possibly could, and make him an offer

00:12:33.520 | that you would be really thrilled with, and then see if he takes it.

00:12:36.900 | If he wants it, great.

00:12:37.900 | If he doesn't want it, I wouldn't get attached to the house.

00:12:40.680 | I don't think that this is a great time to be buying a house if you can avoid it.

00:12:46.080 | We're clearly in a very, very hot seller's market, and so if you're flexible like you

00:12:52.160 | are, I would wait for the market to cool and for a better deal to emerge.

00:12:57.860 | So this might be that better deal, but I would negotiate diligently to try to see if you

00:13:02.640 | could get good numbers.

00:13:04.640 | Great.

00:13:05.640 | Thank you for all that advice.

00:13:09.080 | So all of that information that you just mentioned, would I include that in my offer letter to

00:13:14.940 | him, you're proposing?

00:13:16.600 | I wouldn't necessarily include it in an offer letter.

00:13:19.480 | It depends.

00:13:20.600 | So everyone will have their style.

00:13:23.220 | What I would do is do it face-to-face and present my offer.

00:13:28.320 | I would present a check with it in some appropriate way.

00:13:31.540 | Maybe you have a contract.

00:13:32.540 | Maybe you have a go-ahead-and-grab-a-sales-contract.

00:13:35.880 | Ask a friend of yours or a real estate agent to give you a standard contract, something

00:13:39.720 | with it, and I would give him a check as a down payment.

00:13:43.840 | Basically I believe in win-win negotiation, and I don't think that you lose in most places

00:13:50.000 | by simply playing things honestly.

00:13:52.680 | And so I don't claim to be the world's greatest negotiator, but the language that I just said

00:13:58.480 | is language that I would use.

00:14:00.160 | I would make it very clear that you like the house, you think it's a great house.

00:14:03.920 | I'd make it very clear all of his options, that he could probably put it on the market

00:14:07.840 | very quickly and probably sell it.

00:14:09.760 | It's a great time to sell a house.

00:14:11.280 | I would also make it clear what my interests are and that if he wants to do business with

00:14:15.480 | me, here's what I can offer.

00:14:17.640 | And if you don't want to negotiate on price, if you don't want to offer him his asking

00:14:22.640 | price, which I think is perfectly fair, what I would do is I would emphasize the negotiation

00:14:27.980 | on terms.

00:14:28.980 | And in this case, when he's got stage four cancer, especially if he wants or needs the

00:14:32.980 | money himself now, then that's one of the best things that you could do.

00:14:37.040 | You can simply negotiate based on terms, and you can say, "I'll give you a lower price,

00:14:41.240 | but I'll close fast.

00:14:42.240 | I'll waive certain issues.

00:14:44.120 | We know everything that's wrong with the property.

00:14:46.360 | We're already pre-approved.

00:14:47.440 | I can close as quickly as X number of days and make the deal go fast for you."

00:14:52.720 | So to me, that's honest, and I think people appreciate it.

00:14:55.800 | And I think that it helps you to feel good about negotiating for what you are willing

00:15:00.600 | to do.

00:15:02.680 | That's something that I have found to be helpful and effective by simply clarifying for the

00:15:06.280 | person that here are my interests.

00:15:08.400 | If I'm willing to pay top dollar, I'll pay top dollar, but negotiate something else.

00:15:12.160 | If I'm going to try to get a discount on the money, then I want to make it clear why I'm

00:15:17.040 | doing that and try to emphasize the things that I can offer that would help somebody

00:15:21.600 | to take my potentially lower dollar offer.

00:15:24.600 | Great.

00:15:25.600 | Thank you so much for expanding on that.

00:15:29.680 | That was really helpful.

00:15:30.680 | Yeah.

00:15:31.680 | Thank you so much for that advice.

00:15:32.680 | My pleasure.

00:15:33.680 | My only comment would be don't feel pressured to make this particular deal work.

00:15:37.740 | If you like the property, go for it, but don't feel pressured.

00:15:40.960 | You're in a situation where there are plenty of houses available for you to rent, plenty

00:15:44.840 | of houses for you to buy, so you should feel no personal pressure.

00:15:48.120 | Nick, in New York, welcome to the show.

00:15:49.840 | How can I serve you today?

00:15:50.840 | Thank you, Joshua.

00:15:51.840 | Can you hear me?

00:15:52.840 | Sounds good.

00:15:53.840 | Great.

00:15:54.840 | Thank you for all you do.

00:15:55.840 | I discovered you last year, and I really appreciate your insights in terms of personal finance

00:16:01.480 | as well as how the faith component interacts and relates to all of that.

00:16:07.200 | My question is the following.

00:16:08.240 | I am a salary W-2 employee, and my salary is relatively high.

00:16:13.600 | I've been doing a bit of consulting on the side, but very minor, like a few thousand

00:16:17.240 | dollars each year.

00:16:19.000 | There is an opportunity for me that there may be an opportunity where for the next couple

00:16:23.640 | of years, I may go into the tens of thousands through that consulting while keeping my full-time

00:16:28.520 | job.

00:16:29.520 | I've gotten a bit of conflicting information online regarding whether creating something

00:16:34.720 | like an S-corp would be better for me from a tax perspective as opposed to keeping the

00:16:39.800 | sole proprietorship right now and paying my top tax bracket for that extra amount.

00:16:46.040 | I wanted to get your insight on that.

00:16:48.880 | What is the nature of your consulting?

00:16:52.320 | I work in IT, so I consult regarding various IT topics.

00:16:59.800 | I don't see any really compelling reason to bother getting involved with an S-corporation

00:17:06.160 | for the sake of a consulting business.

00:17:09.360 | The primary reason why you would establish a corporation is if you face some kind of

00:17:16.160 | liability exposure.

00:17:19.080 | As a consultant, a professional consultant who doesn't have employees, doesn't have

00:17:24.880 | premises, isn't creating something that's generating some kind of liability, you don't

00:17:32.200 | have any major significant liability.

00:17:35.520 | So I don't see any liability reason from what you've just described just now why you need

00:17:40.120 | an S-corporation.

00:17:41.120 | An S-corporation will not save you much, if at all, on your income taxes.

00:17:50.080 | It can only really save you something on your employment taxes.

00:17:54.080 | In your situation, if you have a high salary, you're probably already maxing out the Social

00:18:00.560 | Security wage base.

00:18:02.480 | So let's talk through the tax rules and why someone chooses one over the other.

00:18:07.040 | If you pay yourself as a sole proprietorship, simply filing a Schedule C, then all of the

00:18:13.520 | profit from your business will be taxed as profit from a sole proprietorship, which means

00:18:20.360 | you're going to pay income tax on the profit in the year that you earn it.

00:18:25.480 | Also that you're going to pay self-employment tax if you have not already maxed out the

00:18:32.240 | wage base on the profit.

00:18:34.400 | And so that self-employment tax comes out to be 15.3%.

00:18:38.480 | When you start an S-corporation, you have two potential tax savings opportunities that

00:18:43.760 | are driven by the fact that you can delineate some of your income as salary and some of

00:18:51.360 | your income as profits.

00:18:53.840 | And those profits are paid to you as dividends.

00:18:56.360 | Now there is no specific rule that says, "Here's how much in an S-corporation you can mark

00:19:03.640 | to be salary, and here's how much you can mark to be dividends."

00:19:08.240 | The IRS guidance says when you have an S-corporation, the salary should be based upon what the normal

00:19:16.360 | salary for that function would be in the business.

00:19:19.560 | And so if you're going to earn $50,000 of profit, it would be very unusual to ever have

00:19:24.640 | a business where you have $5,000 of salary, where you could hire somebody to work for

00:19:28.680 | a $5,000 salary and a $45,000 bonus.

00:19:33.080 | And so if you got $50,000 of income, it really doesn't make sense to do that.

00:19:37.200 | You can't do that.

00:19:38.200 | If it gets audited, there's a good chance it's going to be pushed back, and you're going

00:19:42.040 | to have to recharacterize the income.

00:19:46.040 | So would it be reasonable to pay yourself on $50,000 of profit a $30,000 salary and

00:19:51.720 | $20,000 of dividends?

00:19:53.760 | Probably.

00:19:54.760 | And there's no specific rule.

00:19:56.200 | I hear accountants often talk about 50%.

00:19:59.080 | They'll often split it and say 50%.

00:20:01.760 | Now that's not always.

00:20:02.840 | There are good arguments.

00:20:03.840 | If you're making $800,000 of profit, you might very well get away with paying yourself a

00:20:08.160 | $100,000 salary and $700,000 of dividends.

00:20:11.600 | But the idea of tax savings is on your dividends, you can potentially, if those dividends are

00:20:17.880 | taxed at a lower rate, you could potentially save some income taxes on those.

00:20:21.920 | And then also, those dividends are not subject to self-employment taxes.

00:20:25.800 | In general, it's the self-employment taxes that are the big savings.

00:20:28.880 | But if you already have a high salary, then that's not going to be a big savings for you

00:20:32.800 | because you're already going to be maxing out your Social Security wage base, which

00:20:36.880 | just simply leaves you with your Medicare contributions.

00:20:40.120 | So long story short, I think that the costs of establishing an S-Corporation, the costs

00:20:48.560 | of maintaining the S-Corporation, the costs of following the corporate formalities and

00:20:54.680 | maintaining those corporate formalities for something that's a side gig where you might

00:20:59.160 | make a couple tens of thousands of dollars, is more of a hassle than it's worth at the

00:21:04.080 | moment.

00:21:05.240 | If something changes, you come back and you got six figures, now things are different.

00:21:10.640 | But from what you said, it's probably more the cost and the hassle is not worth the savings.

00:21:16.160 | Right.

00:21:17.160 | So, would you, I mean, you talked about liability.

00:21:22.120 | Is there another form, like an LLC, where, you know, there's less of paperwork and, let's

00:21:28.360 | say, recurring costs and headaches where, you know, you think it would make sense or

00:21:33.120 | would you just advise me to just keep my sole proprietorship given the nature of my sort

00:21:38.920 | of, I guess, limited consulting and side income?

00:21:41.960 | Yeah, I would keep it simple myself.

00:21:45.320 | The answer to your question is yes, you can establish an LLC.

00:21:49.200 | An LLC has fewer corporate formalities and then you can elect for that LLC to be taxed

00:21:56.000 | as an S-Corporation.

00:21:57.840 | You will then have some liability protection.

00:22:01.180 | You will have fewer corporate formalities, although you should still follow good corporate

00:22:06.840 | formalities with an LLC if you actually care about liability protection.

00:22:13.080 | And so it is simpler, but still, it's a cost, it's a hassle, and it's something that has

00:22:18.040 | to be wound up and wound down.

00:22:21.680 | And from what you're describing, you just got some side income here and I would just

00:22:26.760 | file this as a sole proprietorship.

00:22:30.120 | It's really not going to be that big of a savings.

00:22:32.800 | If you sit down, sit down with the amount of money that you expect to deduct, it's not

00:22:37.120 | going to be that big of a savings based purely on profit.

00:22:40.040 | Now, to complicate the answer, what you would probably be most well served at by doing is

00:22:47.760 | asking yourself, "Are there some fringe benefits that I can run through this particular entity

00:22:54.960 | that I can run it through that are benefits one way that wouldn't be benefits another?"

00:22:59.520 | And that question is more complex than I can answer right now.

00:23:02.480 | But let's say that you wanted to set up for yourself a plan, a fully reimbursed health

00:23:08.880 | plan because you're looking and you have a child who is going to need extensive orthodontia

00:23:16.400 | and you'd really love to be able to deduct all $8,000 of his orthodontia bills.

00:23:23.920 | Well then you can go ahead and set up a completely reimbursed medical plan, but you need the

00:23:29.680 | right entity in which that kind of plan is allowed.

00:23:32.000 | That's when I would go ahead and set it up.

00:23:34.480 | But there are benefits to having a sole proprietorship.

00:23:37.360 | A sole proprietorship has its own unique set of benefits.

00:23:40.640 | The biggest benefit of a sole proprietorship is that losses are fully deductible against

00:23:44.880 | active earned income.

00:23:46.560 | And so if your business activities generate paper losses in some way, that can be an exceedingly

00:23:52.040 | valuable tax benefit that you lose when you establish an S corporation or an LLC taxed

00:23:58.040 | as an S. So my answer is I would stick with simple and I would focus on making the business

00:24:03.880 | good.

00:24:05.000 | Then if in the future you see that, "Hey, this is continuing.

00:24:07.680 | I'm going to be doing more consulting, etc."

00:24:10.440 | Then definitely come back and reassess next year.

00:24:13.560 | But from what you described, my instinct is keep it simple for now and then reassess next

00:24:19.000 | year if you see if you have more consulting contracts coming up.

00:24:22.360 | Got it.

00:24:23.360 | Thank you Joshua.

00:24:25.040 | My pleasure.

00:24:26.040 | All right, we go to Peter in the same state.

00:24:29.480 | Peter in New York.

00:24:30.480 | Welcome to the show.

00:24:31.480 | How can I serve you today?

00:24:32.480 | Hey Josh, how are you?

00:24:34.200 | I'm well sir, how are you?

00:24:36.200 | Good, good.

00:24:37.200 | A quick one for you.

00:24:38.440 | So travel related, I'm hoping you have some advice for how to get better packing while

00:24:44.080 | you travel because I'm really bad at it.

00:24:47.960 | Okay.

00:24:49.120 | Where are you going to go and for how long?

00:24:52.800 | No immediate trips planned now, but I just got back from a two week trip to Europe and

00:24:57.080 | brought too much stuff with me.

00:24:58.920 | All right.

00:25:00.000 | Is your suitcase still fresh in your mind?

00:25:02.080 | Is it still literally packed or can you remember what you took?

00:25:05.800 | I can very much remember what I took.

00:25:08.040 | All right.

00:25:09.040 | So begin by making a list of everything that you took and then ask yourself, "Of those

00:25:15.160 | things that I took, how often have I actually used them?"

00:25:20.120 | And for me, this was something that I did repeatedly when I was a new traveler.

00:25:26.480 | I did this exercise where I packed a lot of stuff and I'll give a very embarrassing story,

00:25:32.700 | but I have not always been a lightweight traveler.

00:25:35.440 | Not lightweight at anything, but I've always been a lightweight traveler.

00:25:38.800 | I remember one time we took a family vacation and it was a driving vacation.

00:25:45.280 | We were going to be gone for something like 25 or 30 days, something like that.

00:25:50.240 | And I remember that I was a brash teenager and my arrogant claim was, "I'm going to wear

00:25:56.280 | a different outfit every day."

00:25:57.760 | And I brought 31 different outfits, the number of outfits for the day.

00:26:01.080 | I don't even know how I had 31 different outfits, but I did.

00:26:03.880 | And so I've traveled heavy.

00:26:05.960 | But over the years, once I realized that the pleasure of my trip would dramatically improve

00:26:12.520 | the less luggage that I had, then I began to focus.

00:26:17.320 | And the first step that I did was simply make a comprehensive packing list.

00:26:22.040 | And I wrote down, I'm sure I started with some recommended packing list, but I wrote

00:26:26.920 | down everything that I would want to take systematically on a list.

00:26:31.520 | And then I started packing from that list.

00:26:34.760 | And over time, I used the same list every time.

00:26:37.020 | This was useful to me as a novice traveler to help me recognize that if I packed from

00:26:43.520 | the list, I could pack very quickly.

00:26:45.440 | And I knew that I never needed more than what was on that list.

00:26:49.720 | And so if I just went down my checklist, check, check, check, check, check, check, check,

00:26:52.640 | I knew that when I walked out the door, I would have forgotten nothing because everything

00:26:56.240 | that I possibly would have needed was on that list.

00:26:58.440 | It spurred my thinking and it made packing fast, easy, and not a hassle.

00:27:03.360 | The second thing that I started to do was just notice what I used.

00:27:06.560 | And if I didn't use something, I would just start leaving it behind.

00:27:10.140 | And the more you do that, and the more you realize how lightweight your stuff is and

00:27:14.360 | how that makes most trips better, not all trips, but many trips, much better by being

00:27:20.480 | lighter weight, you have more motivation.

00:27:22.840 | And so just start by dumping the things that you didn't use, that you don't use, and systematically

00:27:28.000 | saying, "Oh, I don't need that much."

00:27:31.100 | You can, after you've done that with what you have, I think your next step, and let

00:27:35.860 | me pause for a moment, take another trip with a lighter load and see if your travel experience

00:27:41.500 | has improved.

00:27:42.500 | Again, I don't believe that all travel experiences are improved by packing lighter.

00:27:48.380 | There are times in which extra baggage is simply not that big of a deal.

00:27:52.700 | If I'm going away for the weekend and I'm driving my car, it really doesn't harm me

00:28:00.300 | if I take a big suitcase that I place in the trunk of my car and then take it out at one

00:28:06.340 | hotel, stick it there, open it up, do my thing, and then close it, put it in the trunk of

00:28:10.420 | my car and drive home.

00:28:11.940 | That's no better or worse because I took a smaller bag.

00:28:15.540 | But when you introduce airline travel, when you introduce multiple airline travel, multiple

00:28:20.500 | stops, when you introduce multiple hotels, what you realize is that every single step

00:28:25.140 | along the way, the luggage weighs you down.

00:28:29.620 | If I were a solo traveler and I were traveling for an extended period, I would never have

00:28:35.900 | more than what I could have in a small backpack.

00:28:38.700 | The idea being, my backpack is always with me.

00:28:42.140 | Then you're totally mobile.

00:28:43.660 | You never have to figure out where to leave your luggage.

00:28:45.900 | You never have to leave your luggage with the bellhop.

00:28:47.900 | I would just pack in a backpack that was always with me.

00:28:53.700 | The time that I did this the most effectively, I proved the value.

00:28:57.940 | I don't remember well enough the liter measurements, but years ago I had just a standard Jansport

00:29:04.980 | book bag.

00:29:05.980 | It was my book bag when I was in high school.

00:29:08.500 | It was the classic Jansport, two pockets, just the standard book bag size.

00:29:14.300 | I traveled for a month, four weeks, in the Philippines with just the clothes and just

00:29:20.900 | everything in that bag.

00:29:22.620 | It was one of the best trips because I always had my stuff.

00:29:25.940 | There was never any lugging of anything.

00:29:28.100 | It fit everywhere.

00:29:29.100 | I could be super mobile and it was wonderful.

00:29:31.780 | As you lighten your load, you can persuade yourself that, "Hey, this is actually worth

00:29:35.620 | doing."

00:29:36.620 | Now, the next step is start looking for a little bit of ... Well, first, you may not

00:29:41.060 | need the advice, but start looking and saying, "How can I simplify this packing load?"

00:29:47.420 | Think about what clothes you wear and what clothes you don't wear.

00:29:50.980 | I basically wear the same thing virtually every day.

00:29:54.980 | I learned years ago that I, for example, I don't wear t-shirts.

00:29:59.140 | I don't find t-shirts any more comfortable than button-down shirts.

00:30:04.220 | Some people do.

00:30:05.220 | I think that's fine, but I don't find them to be any more comfortable for me than button-down

00:30:08.420 | shirts.

00:30:09.420 | I'm more self-conscious when I wear a t-shirt, so I feel more comfortable in a button-down

00:30:13.700 | shirt.

00:30:14.700 | I learned years ago, I just buy Brooks Brothers non-iron button-down shirts, 100% cotton,

00:30:21.580 | and that's just what I wear.

00:30:24.100 | That works in all situations.

00:30:25.420 | I'll go for a hike wearing a Brooks Brothers button-down non-iron shirt, and I'll put on

00:30:30.980 | a tie and go out to a fancy event.

00:30:33.420 | For me, if I'm going to travel, I'm going to take three, maybe four shirts maximum.

00:30:38.480 | They're all going to be variations on exactly the same theme, and I leave everything else

00:30:43.700 | behind.

00:30:46.080 | That's my solution, but no travel hacker would choose what I personally choose.

00:30:51.080 | If you're lacking inspiration, go on Reddit and go to the One Bag Forum on Reddit.

00:30:56.180 | There are also a number of websites, but the One Bag Forum on Reddit is really good, where

00:31:00.620 | there's a lot of people analyzing their gear and finding all kinds of cool solutions.

00:31:05.860 | The world of travel stuff is full of amazing solutions for problems you didn't know you

00:31:14.460 | had.

00:31:15.460 | The Pack Hacker website is very good, where you can go on and you can see, for example,

00:31:19.340 | they have a bunch of great videos, but their One Bag solution for a digital nomad.

00:31:23.920 | How could you fit everything into this one modestly sized backpack?

00:31:27.500 | You'll start to see that there are some basic themes.

00:31:29.760 | You choose a color scheme.

00:31:31.380 | Ideally, all of your clothes work with one another, so you can minimize the number of

00:31:34.840 | clothes that you have.

00:31:36.200 | You choose clothes that are versatile, and you make sure that they work in multiple situations.

00:31:43.740 | You choose clothes that are quick-dry, so you can wash them yourself.

00:31:46.980 | You can downsize as much as you want or need to.

00:31:50.980 | Your luggage will look different if you are going on a business trip, suit and tie every

00:31:55.260 | day, but the same principles simply apply.

00:32:00.320 | Those are the resources that I would use.

00:32:02.420 | Then look at what you have and try to figure out solutions that work for you.

00:32:08.720 | For me, the bane of my existence is shoes.

00:32:11.180 | I wear American size 16 shoes, which means that I have two problems.

00:32:16.660 | Number one, my shoes are massive, and they take up far more space than virtually anyone

00:32:23.460 | else's shoes do in any kind of luggage that I have.

00:32:27.160 | If I'm going to take an extra pair of shoes, I have real trouble fitting much more than

00:32:32.540 | the shoes.

00:32:33.540 | The second problem that I have is I simply cannot find the shoes that I need anywhere.

00:32:38.700 | The only place that I can get shoes is through mail order, obviously with the internet.

00:32:43.540 | When I travel, I can't just go without shoes because unlike if I had a perfect size 12,

00:32:48.740 | I could pick up a pair of shoes anywhere.

00:32:51.020 | Then I don't have that blessing.

00:32:55.820 | You have to look around and say, "How do I solve my problem?"

00:32:59.620 | For me, I try to find versatile footwear.

00:33:01.480 | Your situation may be totally different, but if you'll follow those steps through of simply

00:33:05.740 | making a list of what you use, systematically noticing what you're not using on the next

00:33:11.180 | trip, leaving those things behind, realizing that your life and your travel style is actually

00:33:15.860 | better without those things, and then looking for solutions and then trying the fancy solutions

00:33:23.180 | that other people find useful, that's the process that I would use.

00:33:28.300 | We go to David in Alabama.

00:33:30.100 | David, welcome to the show.

00:33:31.100 | How can I serve you today, sir?

00:33:32.100 | Hey, Joshua.

00:33:33.100 | Thank you for taking my call.

00:33:40.180 | I'm interested in international diversification.

00:33:42.540 | I'm in the process of getting a second citizenship and second residency in Panama and Mexico.

00:33:52.220 | I feel like I'm pretty safe on the physical side of things as far as diversification.

00:33:56.180 | I'm more interested in this call about talking about finances.

00:34:02.260 | I've been reading a lot about different banks internationally.

00:34:07.260 | I'm looking at maybe opening up a brokerage account overseas, but I wanted to talk to

00:34:11.580 | you about opening up an international LLC.

00:34:16.140 | I'm looking at Nevis to do something like that.

00:34:18.180 | I didn't know if you could talk about the advantages and disadvantages of that.

00:34:22.220 | Those are two very different things.

00:34:24.940 | Banks, international brokerage accounts, and an international business, those don't necessarily

00:34:31.760 | follow one another.

00:34:32.760 | Let's begin with banks and brokerage accounts.

00:34:36.140 | Why do you want to open an offshore bank account?

00:34:38.820 | One of my main concerns going forward are the potential of capital controls in the United

00:34:46.780 | States.

00:34:47.780 | Good.

00:34:48.780 | Okay.

00:34:49.780 | Have you yet, have you already opened an international bank account?

00:34:51.900 | Do you have anything existing now?

00:34:54.220 | Yes.

00:34:55.220 | Okay.

00:34:56.220 | At the very least, you have Panama, right?

00:34:58.420 | Correct.

00:34:59.420 | Because if you're doing the Panama Friendly Nations Visa, you'll have at least a Panamanian

00:35:02.660 | bank account.

00:35:03.660 | Good.

00:35:04.660 | So, what do you next need in your international banking that you don't currently have?

00:35:17.220 | Well, with the business that I have, it would be nice to be able to have a PayPal or something

00:35:28.500 | like that attached to my account, but I don't know if that's possible.

00:35:34.100 | A business, you know, I'm really looking just maybe to invest in real estate or getting

00:35:38.260 | involved in, you know, again, open up a brokerage account and diversifying that way.

00:35:46.060 | All right.

00:35:47.060 | So, and by the way, I'm not picking at you, but these things actually are not as straightforward

00:35:52.260 | as you say.

00:35:53.260 | Okay.

00:35:54.260 | So, for banking, it sounds like what you would like to have is you would like to have the

00:35:58.260 | potential for more diversification with your merchant account.

00:36:02.380 | You'd like to be able to collect money from your customers with money that's not necessarily

00:36:07.500 | flowing through the United States.

00:36:08.700 | Is that true?

00:36:10.060 | Yes.

00:36:11.060 | Okay.

00:36:12.060 | So, that's different than just another international bank account.

00:36:15.140 | Now, brokerage account.

00:36:17.340 | Why do you want an offshore brokerage account?

00:36:21.620 | So I can invest in other stock markets.

00:36:25.980 | Okay.

00:36:27.460 | And so that's also straightforward.

00:36:29.220 | We'll come back to that in a moment as well.

00:36:31.180 | So, an international business entity.

00:36:35.540 | Why do you want an international business entity?

00:36:38.580 | Well, again, I don't know if it's necessary for me, but if I was going to open up a brokerage

00:36:47.420 | account overseas, I'm wondering if it would be best to have an international LLC attached

00:36:54.260 | to that or should I do that more on a personal level?

00:36:57.660 | Right.

00:36:58.660 | So, I will not be able to answer your questions here in a satisfactory way because this is

00:37:07.140 | where you do need some personalized advice.

00:37:10.940 | So I'm going to tell you how to think about it in a way that will help you hopefully arrive

00:37:15.140 | at the best conclusions, but this is where you will need some personalized advice.

00:37:20.820 | So, to begin with, kudos for taking action on establishing some offshore residencies

00:37:29.900 | and working on the path towards a second passport.

00:37:34.060 | Do you continue to live full-time in the United States?

00:37:37.660 | Yes, sir.

00:37:38.660 | All right.

00:37:39.660 | So that will complicate matters because there actually can be substantial downsides to your

00:37:46.940 | owning an offshore company, especially if that offshore company is used for active business

00:37:55.700 | if you are living in the United States.

00:37:59.300 | What you would want to read about is what are called the controlled foreign corporation

00:38:02.580 | rules and basically it imposes a higher level of difficulty in work and in some cases a

00:38:09.200 | higher expense for owning offshore corporations that you're the majority shareholder of while

00:38:15.180 | you are living and working in the United States.

00:38:18.580 | It will also add complexity to your life and so you want to be cautious not to add complexity

00:38:24.220 | that's not necessary, that's not actually getting you something that's genuinely valuable.

00:38:29.420 | There is a cost to every step of an offshore process and so you want to be thoughtful of

00:38:36.860 | the costs and make sure that you're doing the things that are going to actually serve

00:38:40.540 | you but not just go out and randomly start corporations and start companies and randomly

00:38:46.860 | start bank accounts in ways that aren't going to help you.

00:38:52.180 | With regard to banking, I would say your decision process is number one, you need if you're

00:38:57.300 | concerned about capital controls and currency controls, number one, you start with just

00:39:01.700 | at least one bank that's offshore and once you have one bank that's offshore then it

00:39:07.780 | starts to be less weird to you.

00:39:11.300 | Was it weird before you opened your first offshore bank account the idea of going abroad

00:39:14.860 | to open a bank account?

00:39:17.180 | No sir.

00:39:18.180 | Wasn't for you, okay, you're unusual.

00:39:20.420 | So most people find it strange, weird, they feel like they're doing something sneaky,

00:39:24.420 | wasn't for you.

00:39:25.540 | So the second thing is you look at your banking needs and you ask yourself what do I need

00:39:30.140 | and want with my banking needs.

00:39:32.320 | If you've got a million dollars that is sitting in your bank accounts in the United States

00:39:37.060 | and what you're concerned about is moving your million dollars outside of the United

00:39:42.420 | States so that it is hopefully outside of potential future capital controls then you

00:39:51.300 | want to think thoughtfully and with a million dollars you can go to the world's best banking

00:39:55.020 | jurisdictions right, you can go to Europe, you can go to Asia, you can open a top level

00:40:01.180 | private bank relationship and take your million dollars and be treated very, very well.

00:40:07.500 | That's different than $10,000.

00:40:09.100 | With $10,000 the plan is different.

00:40:11.500 | So with banking you need to start by how much money do I want to bank and then choose the

00:40:15.980 | jurisdiction that provides you with what you need.

00:40:18.740 | The second thing you need to consider with banking is what currencies do you want to

00:40:21.580 | hold your money in.

00:40:22.580 | Do you want to hold it in US dollars or do you want to diversify now?

00:40:27.160 | Do you want to keep it in US dollars but have the ability to diversify later or do you want

00:40:32.420 | to diversify now?

00:40:33.540 | No right or wrong answer but that's what's going to drive the banks that you choose.

00:40:37.240 | The second thing with a brokerage account, the brokerage account that you choose will

00:40:41.580 | be driven not by where you want to go but rather what markets do you want to invest

00:40:47.020 | into.

00:40:48.020 | So if you're trying to purchase shares that are held on an Asian stock market that you

00:40:56.420 | can't invest in easily through your US based entities and that is absolutely the perfect

00:41:01.140 | scenario for you to go and establish an international brokerage account.

00:41:05.340 | But you'll want to do that in the jurisdiction that will best allow you to engage in the

00:41:09.140 | investment activities that you're having there.

00:41:11.740 | You mentioned in passing real estate.

00:41:15.020 | Different than the United States, investing in real estate using an offshore company is

00:41:23.080 | often not a good idea when outside of the United States.

00:41:28.780 | In the United States there's really no downside except some cost and some complexity to investing

00:41:34.740 | in real estate through an entity instead of owning it personally.

00:41:39.360 | And there are substantial asset protection benefits, substantial privacy benefits that

00:41:43.200 | can be achieved by using an entity.

00:41:45.460 | That's not necessarily the case though in many other countries and so what you need

00:41:48.980 | to do is if you're going to buy real estate start with what country am I going to buy

00:41:52.700 | real estate in and then get advice locally as far as what would be the best way to do

00:41:58.940 | that.

00:41:59.940 | And your ownership of personal real estate in your own name goes a lot farther outside

00:42:06.300 | of the borders of the United States than it does inside of the borders of the United States.

00:42:10.020 | In addition, if privacy is something that's important to you, you gain additional privacy

00:42:16.300 | with your money by owning the property personally.

00:42:21.660 | Whereas if you establish a business entity that owns real estate now you have additional

00:42:26.380 | reporting requirements to the US government.

00:42:29.740 | And so you may not want to establish an offshore company for the purposes of owning real estate.

00:42:40.100 | Third and final thing, what about an offshore company for doing business?

00:42:44.540 | Here you'll need to clarify how big is my business and how much can I move offshore

00:42:53.620 | now and then the jurisdiction that's appropriate for you will emerge.

00:43:02.420 | Establishing an offshore company is exceedingly easy.

00:43:06.940 | You can go online, you can find plenty of people who will sell you all the paperwork

00:43:12.300 | and officially register and file a company that's held in an offshore jurisdiction.

00:43:17.660 | Having an offshore company that actually does something for you is much more difficult.

00:43:23.180 | For example, first step of having an offshore company is can I open a bank account for this

00:43:27.620 | company?

00:43:29.100 | That's much more challenging than you might expect.

00:43:32.720 | And so you want to be very thoughtful with the jurisdiction that you choose if you need

00:43:36.460 | banking that's abroad.

00:43:38.540 | Now here it's going to relate to your current business.

00:43:42.140 | Are you trying to open an offshore company that's going to be either a subsidiary of

00:43:49.580 | or a holder of your current company?

00:43:52.460 | If so, things are simpler.

00:43:54.860 | From a banking perspective, you might continue to do some banking in the United States.

00:43:57.980 | You may not need foreign bank accounts.

00:44:00.300 | I've advised people frequently to establish an offshore company, have that offshore company

00:44:05.540 | hold a US LLC, but to do all of their banking and their merchant processing in the name

00:44:10.620 | of the US LLC.

00:44:12.180 | It's basically invisible to your clients that you're offshore.

00:44:15.820 | Thus your merchant relationships are simple.

00:44:17.580 | PayPal doesn't flag you.

00:44:19.260 | Stripe works with no problem.

00:44:20.620 | Your bank accounts work with no problem and just the entity is sitting there.

00:44:24.020 | And so in that situation, you can go to whatever cheap offshore tax haven you can find that

00:44:28.540 | will work for you.

00:44:29.740 | On the other hand, if you're actually working to set up a robust second system, you want

00:44:37.060 | a genuine offshore company.

00:44:39.240 | You want that offshore company to have all of its own separate paperwork to not be connected

00:44:43.340 | to you.

00:44:44.340 | You want that offshore company to have its own bank accounts.

00:44:46.540 | You want that offshore company to have its own merchant processor so that if for some

00:44:50.700 | reason you needed to change your US operations or if you just wanted to have the diversification

00:44:56.180 | for another project, then now you're going to invest much more heavily in going to the

00:45:01.220 | appropriate jurisdiction that will allow you to do that.

00:45:05.300 | And that's where you get into the benefits of a Hong Kong company as compared to a Nevis

00:45:12.500 | company.

00:45:13.500 | That's where you get into the benefits of a Dubai company versus a Belize company.

00:45:21.920 | And here you're going to want to pay a lot of attention to blacklisting.

00:45:27.020 | Which countries are blacklisted and which are not?

00:45:30.260 | You're going to want to pay a lot of attention to tax treaties.

00:45:33.500 | Where are you doing business and generating income and such?

00:45:36.820 | And do you need a country that has an appropriate tax treaty based upon where you're generating

00:45:42.140 | income?

00:45:43.460 | And it does get much more complex.

00:45:45.580 | And so if those parts of your offshoring plan are parts that involve significant sums of

00:45:57.740 | money and if you are ready to pay tens of thousands of dollars to set up that infrastructure,

00:46:03.480 | then you will want to get personalized advice on each of those pieces.

00:46:09.540 | But don't just get them unless they're actually necessary and useful and thus worth paying

00:46:13.620 | the money to put them in place and to keep them in place.

00:46:17.020 | Got it.

00:46:18.020 | Thank you very much.

00:46:19.900 | My pleasure, sir.

00:46:21.020 | And congratulations for taking action and I hope that you never need any of those plans.

00:46:26.300 | Thomas, welcome to the show.

00:46:27.300 | How can I serve you today, sir?

00:46:28.300 | Thomas, you're up.

00:46:29.300 | I hear the cricket.

00:46:30.300 | Hi, Joshua.

00:46:31.300 | There we go.

00:46:32.300 | You're in.

00:46:33.300 | Thanks for taking my call.

00:46:34.300 | My pleasure.

00:46:35.300 | Hello?

00:46:36.300 | Yep.

00:46:37.300 | Sounds good.

00:46:38.300 | Great.

00:46:39.300 | With regards to your recent podcast on being too conservative, how would you think through

00:46:40.300 | how much of a net worth would you put into speculation?

00:46:41.300 | Is it just anything over a certain amount or kind of a percentage of assets or just

00:46:42.300 | what's your process of thinking through that?

00:46:43.300 | And how would that be used to make a decision?

00:46:44.300 | I mean, I think it's a good question.

00:46:45.300 | I think it's a good question.

00:46:46.300 | I think it's a good question.

00:46:47.300 | I think it's a good question.

00:46:48.300 | I think it's a good question.

00:46:49.300 | I think it's a good question.

00:46:50.300 | I think it's a good question.

00:46:51.300 | I think it's a good question.

00:46:52.300 | I think it's a good question.

00:46:53.300 | I think it's a good question.

00:47:00.300 | I think it's a good question.

00:47:06.300 | I think it's a good question.

00:47:12.300 | I think it's a good question.

00:47:18.300 | I think it's a good question.

00:47:24.300 | I think it's a good question.

00:47:32.300 | I think it's a good question.

00:47:38.300 | I think it's a good question.

00:47:44.300 | I think it's a good question.

00:47:50.300 | I think it's a good question.

00:47:56.300 | I think it's a good question.

00:48:02.300 | I think it's a good question.

00:48:08.300 | I think it's a good question.

00:48:14.300 | I think it's a good question.

00:48:20.300 | I think it's a good question.

00:48:26.300 | I think it's a good question.

00:48:32.300 | I think it's a good question.

00:48:38.300 | I think it's a good question.

00:48:44.300 | I think it's a good question.

00:48:50.300 | I think it's a good question.

00:48:56.300 | I think it's a good question.

00:49:02.300 | I think it's a good question.

00:49:08.300 | I think it's a good question.

00:49:14.300 | I think it's a good question.

00:49:20.300 | I think it's a good question.

00:49:26.300 | I think it's a good question.

00:49:32.300 | I think it's a good question.

00:49:38.300 | I think it's a good question.

00:49:44.300 | I think it's a good question.

00:49:50.300 | I think it's a good question.

00:49:56.300 | I think it's a good question.

00:50:02.300 | I think it's a good question.

00:50:08.300 | I think it's a good question.

00:50:14.300 | I think it's a good question.

00:50:20.300 | I think it's a good question.

00:50:26.300 | I think it's a good question.

00:50:32.300 | I think it's a good question.

00:50:38.300 | I think it's a good question.

00:50:44.300 | I think it's a good question.

00:50:50.300 | I think it's a good question.

00:50:56.300 | I think it's a good question.

00:51:02.300 | I think it's a good question.

00:51:08.300 | I think it's a good question.

00:51:14.300 | I think it's a good question.

00:51:20.300 | I think it's a good question.

00:51:26.300 | I think it's a good question.

00:51:32.300 | I think it's a good question.

00:51:38.300 | I think it's a good question.

00:51:44.300 | I think it's a good question.

00:51:50.300 | I think it's a good question.

00:51:56.300 | I think it's a good question.

00:52:02.300 | I think it's a good question.

00:52:08.300 | I think it's a good question.

00:52:14.300 | I think it's a good question.

00:52:20.300 | I think it's a good question.

00:52:26.300 | I think it's a good question.

00:52:32.300 | I think it's a good question.

00:52:38.300 | I think it's a good question.

00:52:44.300 | I think it's a good question.

00:52:50.300 | I think it's a good question.

00:52:56.300 | I think it's a good question.

00:53:02.300 | I think it's a good question.

00:53:08.300 | I think it's a good question.

00:53:14.300 | I think it's a good question.

00:53:20.300 | I think it's a good question.

00:53:26.300 | I think it's a good question.

00:53:32.300 | I think it's a good question.

00:53:38.300 | I think it's a good question.

00:53:44.300 | I think it's a good question.

00:53:50.300 | I think it's a good question.

00:53:56.300 | I think it's a good question.

00:54:02.300 | I think it's a good question.

00:54:08.300 | I think it's a good question.

00:54:14.300 | I think it's a good question.

00:54:20.300 | I think it's a good question.

00:54:26.300 | I think it's a good question.

00:54:32.300 | I think it's a good question.

00:54:38.300 | I think it's a good question.

00:54:44.300 | I think it's a good question.

00:54:50.300 | I think it's a good question.

00:54:56.300 | I think it's a good question.

00:55:02.300 | I think it's a good question.

00:55:08.300 | I think it's a good question.

00:55:14.300 | I think it's a good question.

00:55:20.300 | I think it's a good question.

00:55:26.300 | I think it's a good question.

00:55:32.300 | I think it's a good question.

00:55:38.300 | I think it's a good question.

00:55:44.300 | I think it's a good question.

00:55:50.300 | I think it's a good question.

00:55:56.300 | I think it's a good question.

00:56:02.300 | I think it's a good question.

00:56:08.300 | I think it's a good question.

00:56:14.300 | I think it's a good question.

00:56:20.300 | I think it's a good question.

00:56:26.300 | I think it's a good question.

00:56:32.300 | I think it's a good question.

00:56:38.300 | I think it's a good question.

00:56:44.300 | I think it's a good question.

00:56:50.300 | I think it's a good question.

00:56:56.300 | I think it's a good question.

00:57:02.300 | I think it's a good question.

00:57:08.300 | I think it's a good question.

00:57:14.300 | I think it's a good question.

00:57:20.300 | I think it's a good question.

00:57:26.300 | I think it's a good question.

00:57:32.300 | I think it's a good question.

00:57:38.300 | I think it's a good question.

00:57:44.300 | I think it's a good question.

00:57:50.300 | I think it's a good question.

00:57:56.300 | I think it's a good question.

00:58:02.300 | I think it's a good question.

00:58:08.300 | I think it's a good question.

00:58:14.300 | I think it's a good question.

00:58:20.300 | I think it's a good question.

00:58:26.300 | I think it's a good question.

00:58:32.300 | I think it's a good question.

00:58:38.300 | I think it's a good question.

00:58:44.300 | I think it's a good question.

00:58:50.300 | I think it's a good question.

00:58:56.300 | I think it's a good question.

00:59:02.300 | I think it's a good question.

00:59:08.300 | I think it's a good question.

00:59:14.300 | >> Thanks, Joshua.

00:59:20.300 | I think there's a lot of good points, especially what you're saying about someone who has gone through the work of saving, investing and building up some capital initially.

00:59:26.300 | It's less of a deal for that person to go back and do it again.

00:59:32.300 | That's a good point.

00:59:38.300 | >> Let me go on with one more example that I think does prove another point.

00:59:44.300 | It's a practical example.

00:59:50.300 | I have been able to offer private consulting.

00:59:56.300 | I have learned that I have more than a handful, more than I've had consulted with clients, more than what can fit on one hand.

01:00:02.300 | Somewhere between five and ten of my listeners in this audience who have become bitcoin millionaires.

01:00:08.300 | I love it.

01:00:14.300 | I love it.

01:00:20.300 | These are guys who started with very little, but they believed in bitcoin early on.

01:00:26.300 | Bitcoin has been very kind to them.

01:00:32.300 | My favorite story is a client of mine who was working in a blue collar job.

01:00:38.300 | For several years he worked nonstop taking every bit of overtime that he could.

01:00:44.300 | He was making six figures.

01:00:50.300 | He literally lived in his car, which was a compact car.

01:00:56.300 | He put every dollar that he could manage from living on nothing and working like a crazy man into bitcoin.

01:01:02.300 | I had a conversation with him a few years ago when he was in that process.

01:01:08.300 | Fast forward a few years with the massive growth of bitcoin prices, his wealth had gone from more modest to several million dollars.

01:01:14.300 | The best example I could give is the advice that I gave to him.

01:01:20.300 | We tried to approach it in that scenario was, what would be the impact of various scenarios?

01:01:26.300 | If a guy goes from zero dollars of net worth to several million dollars of net worth,

01:01:32.300 | there is a major decline in going from several million dollars of net worth down to zero.

01:01:38.300 | It is very possible that the terminal value of bitcoin is zero dollars.

01:01:44.300 | It's possible that that happens in the future.

01:01:50.300 | For all you and I know, we could be in a scenario where in 2023 bitcoin is worth exactly zero dollars.

01:01:56.300 | It's possible.

01:02:02.300 | It's far more probable that that happens and that the US dollar is worth exactly zero dollars.

01:02:08.300 | It's possible.

01:02:14.300 | It's far more probable that that happens and that the US dollar is worth exactly zero dollars in 2023.

01:02:20.300 | At least in my estimation.

01:02:26.300 | It's also possible and probable that bitcoin goes from almost fifty thousand dollars to five hundred thousand dollars.

01:02:32.300 | There's no fundamental reason why it couldn't be that we couldn't measure one bitcoin the value of five hundred thousand dollars of US dollar fiat.

01:02:38.300 | US dollar tokens.

01:02:44.300 | That's also possible.

01:02:50.300 | But if you think about the impact of going from a multi-millionaire down to zero versus going from a multi-millionaire to a few tens of millions,

01:02:56.300 | there is a much bigger impact in going from multi-million to zero than there is from going from a multi-million to tens of millions.

01:03:02.300 | So my advice to this particular client was let's talk about something like maybe a third.

01:03:08.300 | Move a third off the table and out of bitcoin.

01:03:14.300 | You may still believe in bitcoin but if you know that for the rest of your life you never have to go but you never have to not be a millionaire,

01:03:20.300 | that's genuinely life-changing because for the rest of your life you have freedom.

01:03:26.300 | And so maybe you give up on the top side.

01:03:32.300 | Maybe if bitcoin went to five hundred thousand dollars per US dollars per coin,

01:03:38.300 | maybe you instead only have twenty five million dollars instead of thirty five million dollars.

01:03:44.300 | That's not going to matter nearly as much as the risk of going from going down to zero.

01:03:50.300 | So when you look at it and you play these scenarios,

01:03:56.300 | you can be aggressive but your aggressiveness has to change at different points depending on the various outcomes.

01:04:02.300 | That's the fundamental point. I wanted to give an example to try to clarify.

01:04:08.300 | Any additional comments on that, Thomas?

01:04:14.300 | All right. Hearing none, we move on for our final call of the day to Indiana.

01:04:20.300 | Welcome to the show. How can I serve you today?

01:04:24.300 | Can you hear me? Yes. Go ahead.

01:04:28.300 | Great. So first off, thanks for all that you do. Your career and income course and your podcast have enabled me to get a 20 percent raise at my job.

01:04:38.300 | So, yeah. So I've always admired your ability to break things down into an accessible, digestible chunk.

01:04:48.300 | And I'm sort of in a very I mean, I'm in a slump right now.

01:04:53.300 | I have a five month old son. I have a 70 K job as a business analyst.

01:05:00.300 | Very, very flexible job. I work from home.

01:05:03.300 | I'm also have a side hustle bringing about 15, 20 K in the wedding music business.

01:05:10.300 | And what you mentioned this earlier about, you know, doing things that had low value in the long run.

01:05:16.300 | And I feel like I'm just in. I'd like to consolidate my career into something that's not dollars per hour.

01:05:25.300 | You know, eventually get into, you know, hopefully real estate. But it seems like all of the all the roadblocks in my life come down to income.

01:05:33.300 | And so I took the career income course. I didn't do any of the journaling exercises.

01:05:40.300 | I, I find I have I'm sure other people are the same way.

01:05:45.300 | We read a lot of books, you know, overanalyze things. And a year later, nothing's been done.

01:05:51.300 | So I'm just I it's so hard to resist that easy, you know, five hundred thousand dollars, you know, cash.

01:06:00.300 | Where that sucks up a lot of my time, where I could be focusing on a long term career.

01:06:03.300 | So every time I go to research, you know what I could do to make, you know, 200000 by January of 2024.

01:06:11.300 | I just get bogged down in the research and I really I don't get anywhere.

01:06:15.300 | And so I'm wondering if how you would approach breaking this down in order to take some concrete steps forward.

01:06:24.300 | Your career as a business analyst described without giving any personal and identifiable information.

01:06:32.300 | Describe to me what you're doing, for whom are you working, etc.

01:06:37.300 | I work for a local university. I do basically process improvement, software implementations.

01:06:45.300 | I got into it sort of randomly. I actually have a degree in music.

01:06:50.300 | And so I'm sort of dealing with sort of what they call it, like an imposter syndrome to where when I look at somebody who's making, you know, 100K.

01:06:59.300 | Oh, project manager. I could never do that. Or how did someone even get to 200K?

01:07:05.300 | Like is it sales? Like, but so that's it. Yeah. Basically, software.

01:07:11.300 | Good. Do you feel like the business analyst job is a good fit for you?

01:07:18.300 | Do you feel like it hits on some of your strengths? And while it may not be perfect, do you do you gain a sense of satisfaction from it?

01:07:26.300 | I do. I'm a very analytical person.

01:07:30.300 | So being able to communicate, you know, more complex process flows is something I do like.

01:07:35.300 | But I feel like I've always suffered from being just naturally good at a lot of things.

01:07:42.300 | And it's always led me to just not make any decisions about what to take a concrete step forward.

01:07:50.300 | And so I basically I have I have found myself here by following my strengths.

01:07:59.300 | So obviously making a big, you know, making a big career change would would take some pain and acknowledging weaknesses and really focusing.

01:08:09.300 | But I think that's where I'm really stuck right now. And like the new baby, that's sort of like I feel like that's slowing me down in a way.

01:08:17.300 | But I know I think you said, like, just stop doing stuff like when you're when your child is born until you can kind of get into a rhythm.

01:08:24.300 | And so I just feel like I'm stuck in this place and I want, you know, for my family, I want to be able to make it so that my wife, who is a teacher, can not not feel like she has to work.

01:08:38.300 | So the reason I ask about the business analyst perspective is as far as I can see, that's a clearly straightforward career growth plan.

01:08:48.300 | And we don't have to be all that smart. You don't have to be particularly imaginative.

01:08:53.300 | You can easily, easily parlay your $70,000 a year current business analyst job into without question a $270,000 a year business analyst job.

01:09:07.300 | And there's not a lot of room. It's a proven pathway.

01:09:13.300 | Now, the first thing I would do is I would probably drop the side hustle because especially with a newborn, I would think that the side hustle is possibly going to be with wedding music.

01:09:29.300 | So you're DJing weddings and things like that?

01:09:33.300 | I'm a live music performer. So ceremonies, cocktails.

01:09:39.300 | In your analysis, is there any genuine breakout potential for you to make a lot of money as a musician?

01:09:48.300 | Beyond literally leaving the house and going out and making that income, there's no way to scale it beyond, you know, say a max of, I don't know, 20, maybe 30, probably about 30k.

01:10:06.300 | So it's like, yeah, that's pretty much it.

01:10:12.300 | So if your honest, genuine analysis says that you probably are not going to break out in the music business, then I would do as much of you want to do of it as fun, you know, as a hobby.

01:10:30.300 | And without question, certainly have people pay you money for your hobby.

01:10:34.300 | But I wouldn't give it any kind of serious development because I believe that there are many people who have and who will be able to use their musical talent and generate a fortune for themselves.

01:10:49.300 | But it's very hard to predict.

01:10:52.300 | And I don't know how you predict it.

01:10:55.300 | I don't know.

01:10:56.300 | I've never studied it enough to do it.

01:10:58.300 | If you thought you had some formula, then go for it.

01:11:02.300 | But I don't know how to predict it and so I can't actually give any advice to it.

01:11:06.300 | I mean, it's a weird beast.

01:11:09.300 | And I'm actually not looking to be famous to do that.

01:11:13.300 | I'm actually looking to scale it as an actual business versus being a rock star.

01:11:18.300 | So I don't see any ability for that business to scale unless you can break out and actually achieve fame.

01:11:24.300 | If you can achieve fame and notoriety, then that business can scale.

01:11:30.300 | So go and look at Rihanna, right?

01:11:32.300 | Rihanna is one of the youngest and fastest billionaires because she parlayed her skill into branding, right?

01:11:42.300 | So you can do it.

01:11:43.300 | And the pathway is you achieve fame and notoriety and then you use that fame and notoriety in personal branding to sell products and services to your fan base.

01:11:56.300 | That's how the business works.

01:11:58.300 | So some of it can come from direct sales.

01:12:01.300 | Now, it can be a very comfortable business, right?

01:12:03.300 | If you really had a great passion for it.

01:12:05.300 | I remember when I was in business school, we read a case study of the Grateful Dead.

01:12:10.300 | And they talked about how one of a phenomenal job the Grateful Dead band had done of being these in some ways not well known.

01:12:22.300 | But yet providing their fans with all these things that made them a phenomenal living and built a really solid business even though they were never just an international superstars.

01:12:34.300 | So I believe you can do it.

01:12:36.300 | I just think it's a very difficult road and a very hard to predict road.

01:12:40.300 | And it requires a tremendous amount of skill and a good dose of luck hitting something right.

01:12:46.300 | And that hitting something right is unpredictable.

01:12:49.300 | So set that aside, right?

01:12:51.300 | Do as much music as you want to for fun.

01:12:53.300 | But what I can give you actionable advice on is the business analyst.

01:12:58.300 | Here, what I would say is remember my three-part strategy that I taught in the course and that I've publicly stated many times about where to focus it.

01:13:06.300 | So what can you actually do to increase your wages when you work for wages?

01:13:12.300 | Number one is you can work more hours.

01:13:14.300 | That is not the path for you.

01:13:17.300 | You don't need to work more hours.

01:13:19.300 | What I would like to do is see you work fewer hours by cutting out the side business, unless it's fun, and investing those hours instead into number two and three.

01:13:28.300 | Number two is you can produce more work per hour.

01:13:31.300 | So the first thing I would do is I would look at your work that you're doing as a business analyst and I would say, "Are there any tools that you don't have that you could have?"

01:13:42.300 | And this can be very, very simple, right?

01:13:44.300 | If you're a business analyst and you're working with a lot of spreadsheets, I would expect that when I walk into your home office, I find three giant curved monitors set up so that you can display every bit of information on three screens in front of you.

01:13:59.300 | Is that what your desk looks like?

01:14:02.300 | No, it's currently just a laptop.

01:14:04.300 | All right.

01:14:05.300 | You have significant room to invest into your tools.

01:14:10.300 | You should have a fast and current computer and you should have three very large monitors arrayed in front of you.

01:14:18.300 | And that's step – that's 101 if you're a business analyst.

01:14:23.300 | You need the ability to have two spreadsheets on the monitor on the left.

01:14:28.300 | You need the ability to have your messaging on the monitor on the right.

01:14:31.300 | And you need the ability to have all of the documentation that you're reviewing on your monitor in the middle.

01:14:36.300 | And for spreadsheets, for documentation, et cetera, the simple, most obvious, most proven productivity hack that you can possibly have is multiple monitors very large.

01:14:46.300 | So get out of here with that working on a laptop thing.

01:14:49.300 | All right.

01:14:50.300 | Next, look at the skills and ask yourself, "What are the skills that I am applying on a daily basis?"

01:14:56.300 | I'm just going to run with some ideas.

01:14:59.300 | You translate these things later.

01:15:01.300 | But if I'm analyzing businesses and I'm involved in a lot of analysis of business finances, I'm going to ask myself, "How well do I really understand how a P&L works?

01:15:13.300 | How well do I really understand the statement of accounts?

01:15:17.300 | How well do I really understand these spreadsheets?"

01:15:20.300 | So maybe you need to dust up a little bit on your accounting.

01:15:23.300 | So I would grab several books on accounting and I would read through financial analysis for dummies and I would take a course.

01:15:33.300 | I would practice some math.

01:15:35.300 | How well can I run a financial calculator?

01:15:37.300 | When I was a new financial advisor, I got a financial calculator and I sat down and I did drills and I would do drills.

01:15:43.300 | How quickly can I produce it?

01:15:45.300 | At this point, most of those things aren't relevant for me.

01:15:47.300 | So my skills have faded, but I got to the point where I could do with nothing more than a financial calculator, I could run all of the projections.

01:15:54.300 | And that's just a simple skill.

01:15:56.300 | That's how you invest in doing more work more quickly.

01:15:59.300 | And you want to enhance your skills.

01:16:01.300 | If you analyze what you're actually doing, you should be able to look and say, "What are the discrete skills that are necessary at each stage of this and how can I invest into those?"

01:16:16.300 | Usually it's going to be books, classes, and those are the primary ones, books and classes.

01:16:23.300 | And so it's a course on how to use Excel.

01:16:26.300 | It's a course on how to use whatever projection software you use.

01:16:31.300 | Do those things.

01:16:33.300 | Now, the next bigger picture is to focus on producing work that's more valuable.

01:16:39.300 | And so there's a very good chance that the work that you're producing for $70,000 per year is exactly the same work that some of my clients are producing for $7 million a year just simply because they're working for a hedge fund and you're not.

01:16:57.300 | Now, I don't know, but the point is that the skills are the same.

01:17:00.300 | And so there's no reason why you can't go from $70,000 a year to $70 million – sorry, well, $70 million, yes – but $7 million a year if you can figure out how to upgrade your skills and then sell them to a higher bidder.

01:17:14.300 | And so the first thing that I would do is I would think about a job that was outside of my comfort range but was achievable.

01:17:25.300 | Let's say you think of something like $200,000 and I would go and I would find and lay out for myself the job that I know where somebody is working as a business analyst of some kind and they're making $200,000.

01:17:39.300 | Do you know anybody who's doing something like business analysis, investment analysis, etc., who's making $200,000 personally?

01:17:48.300 | No. In fact, that's really – that's one of the big questions I have is in the research that I've done, it seems like you have to have an extremely deep level of subject matter understanding or specialization within the field to command that sort of an income.

01:18:05.300 | But I certainly don't know anybody who's anywhere near that.

01:18:09.300 | Okay. So you're right, you do.

01:18:11.300 | You absolutely do have to have a specialization.

01:18:13.300 | But the point is that that's something that's relatively easily acquired.

01:18:17.300 | It's not complicated.

01:18:19.300 | It's not easy because it does take time, it takes study, it takes work.

01:18:23.300 | But it's not complicated to acquire.

01:18:25.300 | That's my point.

01:18:26.300 | So here's what I would say.

01:18:29.300 | Okay. The first thing I would do – some of this is in the course, right?

01:18:32.300 | If I didn't know anybody who was making $200,000, I would look around and I would try to look through my contacts.

01:18:39.300 | I would look through my LinkedIn.

01:18:41.300 | I would go and I would ask someone.

01:18:43.300 | There's guaranteed there is somebody in your network who knows somebody like that.

01:18:48.300 | And so I would ask myself, "Which of my friends is most likely to know somebody who works in some kind of business consulting, business analyst viewpoint?"

01:18:59.300 | And then they can – and then go and – and I would ask my friend to introduce me to somebody.

01:19:08.300 | And I would say – I would be very clear.

01:19:09.300 | Like I wouldn't hide anything.

01:19:10.300 | "Joe, listen. I want to make more money and I'm trying to figure out what skills are missing in my life.

01:19:17.300 | I know, Joe, that you work in an insurance office.

01:19:20.300 | And I bet you guys have some clients who, you know, who make a lot of money and are business – or investment analysts or business analysts or business consultants, right?"

01:19:29.300 | Then I would say to them, I would say, "Can you please introduce me to one of your clients or one of your friends so I can take them to lunch and say,

01:19:38.300 | like, what do I need to learn to be worth $200,000 a year?"

01:19:41.300 | I would figure out a personal referral to somebody who knew somebody who I could go and I could say – and I would call them up and say,

01:19:48.300 | "You know, I want to take – I want to earn more money.

01:19:51.300 | I'm currently earning $70,000 a year as a business analyst.

01:19:55.300 | My goal is to figure out how to prepare myself for a $200,000 a year job.

01:20:00.300 | And so I'm wondering, would you be willing to have lunch with me so I could ask you some questions on some of the things that I need to do?"

01:20:06.300 | And I – my guess is if you ask six people that, three of them will say yes, maybe four, maybe five.

01:20:14.300 | Wouldn't surprise me if four said yes, but at least three of them would say yes and all you need is one.

01:20:19.300 | And then that starts you on the right path to someone to say, "Well, here's what I studied.

01:20:23.300 | Here's what I learned."

01:20:24.300 | The other thing that you need to do, what I would do is if you have some area of specialization, specialized interest,

01:20:31.300 | then I would focus a lot on drilling down into that and then I would see, can I pick up my own clients, right?

01:20:41.300 | Simple things like marketing.

01:20:43.300 | Business analyst is – business analysis is not complicated.

01:20:48.300 | There are only a few basic parts to a business and this is – a lot of this goes back to the course content that I presented, right?

01:20:55.300 | I talked about the five functions inside of a business.

01:20:58.300 | Now, you pick one of those and then you specialize in one of those and then you – and you apply that into the business function.

01:21:05.300 | So, there's people out there right now who – their business model is so simple, right?

01:21:08.300 | What do they do?

01:21:09.300 | They learn how to run Facebook ads.

01:21:12.300 | They learn how to write very, very basic Facebook ads and run them.

01:21:16.300 | They go to local businesses and they charge local businesses $1,000 a month to run their Facebook ads.

01:21:25.300 | Doesn't take a ton of time.

01:21:27.300 | It's not that difficult for you to go out and you need to find 10 local businesses to each pay you $1,000 a month to run their Facebook ads for their particular business.

01:21:38.300 | And that's a business that can be learned in – call it maybe 10 weeks, right?

01:21:45.300 | 10 weeks, 5 books, 5 courses and 10 weeks of practice and you're in.

01:21:52.300 | And if you can run 10 clients like that, you can easily run 20 and there's your $200,000, $250,000 a year depending on your expenses.

01:22:00.300 | So, once you home in on an area of interest, then it's a matter of learning about it.

01:22:07.300 | And the process of learning about it is super simple, right?

01:22:11.300 | You take an area of specialization.

01:22:13.300 | What's an area of specialization that you personally have an interest in, in the functions of business?

01:22:24.300 | I find that burgeoning industry of blockchain really fascinating as a future.

01:22:34.300 | Okay. So, blockchain is an industry but it's not a function of business.

01:22:41.300 | Oh, maybe you can help me out and provide an example.

01:22:45.300 | So, a function of business would be something like marketing, sales, product creation, management, accounting.

01:22:59.300 | I would say somewhere in between marketing and sales.

01:23:06.300 | Maybe a little finance.

01:23:08.300 | Yeah, that's it.

01:23:09.300 | Okay.

01:23:10.300 | So, any of these are fine.

01:23:11.300 | Okay.

01:23:12.300 | So, what do you do?

01:23:13.300 | Well, you say, "Okay, I'm interested in blockchain technology and I'm interested in marketing."

01:23:18.300 | So, what do you do?

01:23:20.300 | Well, me, I go to Amazon, start a local library.

01:23:23.300 | You can do this for free.

01:23:24.300 | Go to your local library and check out every book that they have that has marketing in the title.

01:23:30.300 | My local library in the United States, you can check out 50 books.

01:23:33.300 | So, I can get up to 50 books that have marketing.

01:23:36.300 | And I order from all of the other branches, I order them all sent to my thing and I check out every book they have on marketing.

01:23:42.300 | And then just take them home, flip them through.

01:23:44.300 | Flip through one per night.

01:23:45.300 | Don't try to read them cover to cover.

01:23:47.300 | Just flip them through.

01:23:48.300 | See the terms, see what's in there, etc.

01:23:50.300 | Look at the indexes in the back.

01:23:51.300 | Get an idea of what this book is about.

01:23:53.300 | Get an idea of what marketing means so you have a clear idea in your head of what marketing means.

01:23:58.300 | If you think some of them are good and you can identify the ones that are good, I would also go to Amazon.

01:24:03.300 | I would type "marketing" in the Amazon search bar.

01:24:06.300 | I would look for the books that have the most ratings and the highest ratings on the subject of marketing.

01:24:11.300 | And I would buy 5 or 10 books on the subject of marketing.

01:24:15.300 | And that's my starting point.

01:24:18.300 | Second thing I would do is I would go to podcasts, whatever where you listen to podcasts.

01:24:24.300 | I would search "marketing" and I would sign up for the 5 marketing podcasts that sound like they're the most interesting to me right now.

01:24:32.300 | Do the same thing on YouTube, although in this case audio podcasts are probably better because you get more content made for audio versus YouTube.

01:24:41.300 | But I would go to that as well.

01:24:44.300 | Then I would look for conferences or classes.

01:24:47.300 | And so I would try to figure out, is there a marketing conference that is scheduled?

01:24:52.300 | Is there such a thing?

01:24:54.300 | I would go to DuckDuckGo.com and I would ask the duck for "marketing conference" and I would just start looking through.

01:25:00.300 | And is there anything near me?

01:25:02.300 | I would look around, are there any marketing classes?

01:25:04.300 | Do they have marketing classes at your local university?

01:25:06.300 | I would go to one of the marketing classes, just audit the class or sign up and pay for it, take it, etc.

01:25:11.300 | But I would expose myself to stuff that's about marketing.

01:25:16.300 | Then do the same thing with blockchain.

01:25:18.300 | Say I'm interested in blockchain.

01:25:20.300 | So let me go to Amazon, let me buy 5 books on blockchain technology.

01:25:27.300 | More importantly with something like blockchain is let me go to Twitter and let me follow every account that I can find that's talking about blockchain technology.

01:25:40.300 | Follow the hashtags, follow the trends, etc.

01:25:43.300 | What I would do is I would go and I would pick a conference.

01:25:47.300 | This is what I do.

01:25:49.300 | So I go and I find the Bitcoin conference.

01:25:52.300 | Okay, here's the Bitcoin conference or the blockchain conference or whatever.

01:25:54.300 | Find a conference.

01:25:55.300 | Go through the list of speakers from that conference.

01:25:58.300 | And then you find that list of speakers.

01:26:01.300 | Take the list of speakers and go to Twitter and find their Twitter profiles.

01:26:05.300 | A lot of times they're listed on their bios on a conference page.

01:26:09.300 | But if not, just search for their name and you'll find them pretty quickly.

01:26:13.300 | Then what I would do is I would set up in TweetDeck.

01:26:16.300 | I would set up a list or just simply columns in TweetDeck for every single one of those speakers so that I can start following them.

01:26:27.300 | And if you don't have enough, then go and find another conference.

01:26:31.300 | And here's what I can guarantee you.

01:26:33.300 | The people who are speaking at a Bitcoin conference have already been vetted by the organizers of the conference.

01:26:42.300 | They're being brought because they represent something.

01:26:44.300 | They represent a leadership position in this space.

01:26:49.300 | So if you're interested in blockchain and you're not following what Jack Dorsey says about Bitcoin or what Michael Saylor says about Bitcoin or what Elon Musk says about Dogecoin, you're not serious.

01:27:00.300 | And so you start following them and you start finding out what they're doing.

01:27:04.300 | And then follow the trails down.

01:27:06.300 | They tweet out a link to an article or an interview.

01:27:10.300 | So-and-so interviewed Michael Saylor.

01:27:12.300 | Go and listen to the interview.

01:27:15.300 | Here's an article on such a topic on Medium.

01:27:17.300 | Go and read the article.

01:27:18.300 | Find the author.

01:27:19.300 | Follow them.

01:27:20.300 | So curate for yourself, around yourself, a group of teachers who are teaching you about the things that you are interested in.

01:27:28.300 | Then when possible, when the ideas present themselves, you start to think about, "Is there a way that I can connect my interest in marketing with my interest in blockchain technology?"

01:27:41.300 | And the answer is there's tons of ways that you can do it.

01:27:44.300 | But you start looking and you start figuring out where do these things intersect?

01:27:50.300 | Where do they overlap?

01:27:52.300 | And then you look for opportunities within that.

01:27:54.300 | Look for job postings.

01:27:56.300 | Right now, if you become an expert on blockchain technology, quite literally governments around the world will hire you to come and design their sovereign cryptocurrency.

01:28:11.300 | The world is desperate for blockchain consultants at the moment.

01:28:15.300 | Now some of that may be more technical that you're interested in.

01:28:18.300 | But there are lots of options available.

01:28:20.300 | If you're interested in marketing, I would be studying all the ICOs and try to figure out what makes a currency pop, what makes it not pop.

01:28:27.300 | Is there some way that I can be involved in something like that?

01:28:32.300 | There's just no limit to the number of options that are available to you.

01:28:37.300 | And so my answer is you surround yourself by this and you systematically look for opportunities and you systematically change your reference group.

01:28:45.300 | To the point where it is that you're simply surrounded by people who are talking about nothing but blockchain and marketing.

01:28:50.300 | And then in the fullness of time, that will change who you are.

01:28:54.300 | You'll stop worrying about being an imposter.

01:28:56.300 | And if you'll do your homework, you'll study.

01:29:00.300 | You'll read the articles.

01:29:01.300 | You read the books.

01:29:02.300 | You take the classes.

01:29:03.300 | You listen to the seminars.

01:29:04.300 | You go to the conferences.

01:29:05.300 | You pay attention.

01:29:06.300 | You'll study them.

01:29:08.300 | Then you'll be good to go.

01:29:09.300 | And just a classic thing.

01:29:11.300 | If you go to a Bitcoin conference, then buy the recording and then that's what you listen to while you're driving back and forth to work.

01:29:19.300 | And if you go to one conference and you buy the recording and you listen to the recording of that one conference, with that alone, you will be in the top, at least the top 20% of people in the industry.

01:29:32.300 | And you'll have a broad exposure.

01:29:34.300 | And then in the fullness of time, your brain, your creative brain, will either notice the opportunities that are present or will start to put the connections together and you'll start to have ideas.

01:29:47.300 | And then the key success skill to train and to practice is notice the ideas that your brain has.

01:29:55.300 | Don't ever let an idea come into your brain and then leave again without writing it down.

01:30:00.300 | Pay attention to them.

01:30:02.300 | And surround yourself with means of taking notes so that you always have a capture device.

01:30:09.300 | My favorite ones is virtually all the time I wear an Apple Watch.

01:30:15.300 | I have my Apple Watch set so that I have the hot button.

01:30:19.300 | I have the complications with like, what is it, one, two, three, four, five, six, eight, ten complications, eight complications.

01:30:26.300 | One of them is voice memos.

01:30:28.300 | So I can immediately at any point, pretty much 24/7, I have a watch on my wrist that has a voice memo recorder.

01:30:35.300 | So if I have an idea, I immediately hit voice memo and I record the idea.

01:30:38.300 | Phone, same thing.

01:30:40.300 | I have the hot keys set on my phone.

01:30:42.300 | So at any point in time, I just swipe down, boom, new note, write down the note, write down the note, and then just process those.

01:30:48.300 | And if you train, then of course all of the other ways of taking physical notes.

01:30:52.300 | To the point where literally go on Amazon and buy for yourself the little thing that goes in your shower that allows you to have a message board in the shower.

01:31:01.300 | I find that I think very well in the shower.

01:31:03.300 | And so buy that and stick it up on the wall of your shower.

01:31:06.300 | And if you start to pay attention to the ideas that your brain is generating while you are listening to the content, then you become like this creative genius able to simply notice what your brain is doing.

01:31:23.300 | And then as you notice, your brain gets better at doing it and gets better at doing it and gets better at doing it and it's a virtuous cycle.

01:31:30.300 | And so you can do the hard work of preparing yourself now for the position that you want in the future.

01:31:37.300 | There's the old saying, dress for the job that you want to have.

01:31:41.300 | Well, that was probably more true in 1985 than it is today.

01:31:47.300 | Today, while I still think the principle applies, I think you should dress for the job that you want to have.

01:31:52.300 | It's much more bewildering landscape to know how to actually apply that when some of the wealthiest men in the world wear a hoodie every day.

01:32:02.300 | That's a little bit more difficult.

01:32:04.300 | But what I do think is absolutely true is educate yourself for the job that you wish to have.

01:32:11.300 | Prepare yourself for the job that you wish to have.

01:32:14.300 | Put the hard work on yourself and do the homework.

01:32:18.300 | And then if you'll do that, you'll be ready when the job emerges and presents itself.

01:32:24.300 | That's my answer.

01:32:26.300 | Okay.

01:32:27.300 | It seems like there's like sort of a two part process where one, you're figuring out it is your actual interest.

01:32:34.300 | And then the next step is getting into the game, getting in that circle, just bathing yourself in those ideas.

01:32:40.300 | I think where I struggle is I have a lot of general interest.

01:32:45.300 | And so, you know, on any given month, I might be interested in something different.

01:32:50.300 | Do you have any thoughts on how to just like pick something and stick with it?

01:32:55.300 | I think I'm just like worried about closing doors.

01:32:59.300 | I think I've always struggled with this.

01:33:01.300 | So I'm wondering if you have any thoughts on that.

01:33:03.300 | I don't think it matters.

01:33:04.300 | I spent an hour today watching videos and reading everything about a man who lives in a little cart that he built, pulled by a sheep.

01:33:17.300 | And he lives on the side of the road and he practices gorilla grazing.

01:33:22.300 | Basically, the story is he's homeless by choice.

01:33:25.300 | He's not actually homeless because he built this tiny little wagon to live in.

01:33:32.300 | But basically, he wants to help homeless people.

01:33:36.300 | And so he's like developing these technologies and he figured out how to live for free with sheep.

01:33:43.300 | So he has four sheep, three ewes and one ram.

01:33:48.300 | And he has this little cart wagon contraption that he built that has his bed in it and his food and everything.

01:33:54.300 | And he grazes the sheep on free land, you know, the medians of roads and little fields.

01:34:02.300 | And then he milks the sheep and he drinks the milk and he turns the sheep milk into various cheeses and various foods.

01:34:09.300 | And he lives basically, camps nonstop in this little cart that's pulled by his ram.

01:34:16.300 | So, like, I don't know how you could get more weird and off the wall than Joshua Sheets spending an hour of his day-to-day learning about some random thing like that.

01:34:30.300 | I found it fascinating.

01:34:32.300 | And I loved the guy was incredibly brilliant and incredibly well-spoken.

01:34:36.300 | Looks like a total bum, but he's incredibly brilliant, incredibly well-spoken, has a real passion for what he's doing.

01:34:42.300 | It's phenomenal.

01:34:43.300 | I'm @JoshuaSheets, you can see I shared the link to the video.

01:34:47.300 | Point is that I'm not scared of diversity of interests.

01:34:53.300 | However, diversity of interests has to be trained and focused in one specific area if you're actually going to make money.

01:35:05.300 | I have figured out how to find a way for my diversity of interests to shine.

01:35:15.300 | Probably 20% of my audience, because I just shared this weird, wacky little thing about the sheep, 20% of my audience will say, "That sounds cool."

01:35:25.300 | And later they'll go look at my Twitter profile and look at the video that I shared.

01:35:28.300 | It's super cool, right?

01:35:29.300 | But that works in what I'm doing.

01:35:32.300 | But that diversity of interest is not in and of itself a virtue unless you can find a way to profile it.

01:35:41.300 | So if you want to be a podcast host and be able to speak extemporaneously on all kinds of weird things, then you can cultivate the diversity of interests.

01:35:49.300 | Otherwise, I think you have to pick something that's the top of the list, and then you go deep on that.

01:35:56.300 | Because at the end of the day, people pay for their solutions.

01:35:58.300 | You didn't call me, you didn't pay me money to buy my courses, and then call me because you really were interested in finding out that there's a guy who lives with four pet sheep and lives on the side of the road.

01:36:10.300 | You're looking for solutions.

01:36:12.300 | And so if I don't have the ability to go deep on the financial stuff and the 30-minute speech that I gave you that's full of actionable, packed stuff, then none of it really matters.

01:36:20.300 | So you've got to pick something.

01:36:22.300 | What I tell you, though, is you don't have to pick something and be that way forever.

01:36:26.300 | Just pick whatever seems like the best opportunity now.

01:36:29.300 | Go deep on that.

01:36:31.300 | Pay attention to the other interests.

01:36:33.300 | And then move on to the next thing when you think the time is right.

01:36:38.300 | And then if you'll just be a little thoughtful about choosing things that are useful, then it builds your talent stack, right?

01:36:46.300 | To use Scott Adams' phrase, which I think there's nothing better, right?

01:36:48.300 | It builds your talent stack.

01:36:49.300 | And you don't know exactly where that takes you until down the road it actually emerges with the benefit of hindsight.

01:36:58.300 | So pick one thing to focus on and then discipline yourself to go deep on that area.

01:37:04.300 | Pick blockchain and marketing.

01:37:08.300 | Discipline yourself to read 10 books on blockchain, 10 books on marketing.

01:37:12.300 | Discipline yourself to listen to 10 channels or 10 podcasts on those topics.

01:37:16.300 | Just systematically over time.

01:37:19.300 | And then if you want to do something else, then write it down and say, "Okay, I'm now changing."

01:37:24.300 | And just develop the ability.

01:37:25.300 | You've got to discipline yourself in the direction you want to go is the point.

01:37:28.300 | So I'm not scared of diversity of interest, but you've got to specialize if you're going to make progress.

01:37:34.300 | That makes perfect sense.

01:37:37.300 | Thank you very much.

01:37:38.300 | My pleasure.

01:37:39.300 | I think you've got good options.

01:37:40.300 | I tell you, the blockchain industry is wide open right now.

01:37:43.300 | Everybody is desperate for anybody who knows anything about it at all.

01:37:47.300 | And it's only getting started.

01:37:49.300 | So don't think that you're late to the game.

01:37:51.300 | But do the homework and then look for it.

01:37:54.300 | And so if you're good at being a business analyst, great.

01:38:04.300 | There's a whole world available to people for being a crypto analyst.

01:38:10.300 | There are tons of options.

01:38:11.300 | And today, you don't need anyone's permission.

01:38:14.300 | You just simply decide what you want to do and you do it.

01:38:17.300 | So go for it.

01:38:18.300 | Thank you so much for listening to today's show.

01:38:20.300 | That is it for today's podcast.

01:38:22.300 | I'll be back with you very soon with another episode.

01:38:24.300 | Remember, if you would like to be here for next week's Q&A show, go to patreon.com/radicalpersonalfinance.

01:38:30.300 | And I would love to have you on the next episode.

01:38:32.300 | [BEEP]

2021-09-03_Friday_QA